Bringing down the cost of retail financial services - EU consultation
The Commission this week has another stab at building a single market for financial services, opening a consultation with a view to giving European consumers more choice in products such as bank accounts, mortgages and insurance - essential parts of daily life.
Only three per cent of consumers use bank services in another EU Member State, while only one per cent of loans in the euro area are made across borders. Credit card fees also vary drastically between countries.
The Commission hopes that moves towards a single market in retail finance will tackle high prices which come from lack of competition, and provide better access and better choice for consumers. It also hopes to help tackle the barriers that currently prevent businesses from providing services across borders.
"Our goal", said Commissioner Jonathan Hill, launching the consultation, "is that consumers should be able to choose the right product at the right price for them and that businesses should be able to offer their services to customers wherever they are in Europe."
Examples of the sorts of problems experienced by customers include:
- opening a bank account not available to residents of your own Member State
- not being allowed to keep current accounts or debit cards if moving abroad
- high fees for international money transfers
- extra or hidden costs on insurance when renting a car abroad
- lack of protection for cross-border mortgages
- the high cost of switching financial providers
The Commission hopes to the consultation will provide answers to how to break down the barriers to these cross-border financial services.
Its goal is to make it easier for those companies that so wish to offer financial products at retail level in other EU Member States, which would give consumers access to a far greater range of products. People should also be able to take the products with them if they move to another EU country to work, study or retire.
All citizens, stakeholders such as consumer groups and businesses and other interested parties now have until 18 March 2016 to respond.
The Commission will then look to use the results of the consultation to reduce the barriers which stop consumers from accessing financial products and services across borders.
A conference is set for early 2016 to examine the evidence and discuss priority areas. We can expect an Action Plan on Retail Financial Services to follow later next year.
